Barclays bank Uganda says it has already started implementing the new accounting standards that all commercial banks across Africa are required to adopt before the end of this year.
The International Financial Reporting Standards 9 (IFRS 9) requires that all commercial banks put aside money to cater for expected losses from the loans that they give out. This would mean that commercial banks require more money at hand if they are to give out loans or expected credit loss (ECL) provisioning.
Rakesh Jah, Barclays Uganda CEO said: “We have been conservative when it comes to provisions. We don’t see new accounting standards impact us.”
In January, BOU Governor Tumusiime-Mutebile told a Uganda bankers’ association dinner that most commercial banks in the country were at varying stages of preparedness with regard to putting in place the requisite IFRS 9 governance frameworks, policies, procedures and information system capabilities”.
The new standards were approved by the International Accounting Standards Board (IASB) in 2014 and banks must implement them this year.
With this new standard, banks are expected to be more critical on whom they give credit to and the cost of credit is also forecast to move up a little, according industry watchers.
Meanwhile, Barclays Africa group also announced it had started using the name Absa Group Limited as its new brand after its parent firm Barclays PLC sold its majority stake in the group.
It said it would “trade as Absa across its operations currently branded Barclays in Africa.”
The changes for the rest of the subsidiaries outside South Africa will have to be approved by shareholders and regulators and will be implemented in phased manner.
Maria Ramos, the group CEO, said: “We will be Absa, not as you know it, but re-launched, represented, and with an identity fit for the new forward-looking approvals.”
Barclays Uganda will also have to change its identity to Absa. The bank has up to June 2020 to have changed all its brands from Barclays to Absa. Barclays PLC has reduced its stake from 62.2% in the Africa group to 14%, making it one of the minority shareholders in the lender.